How Rhode Island’s ‘Dignity Bus’ homeless shelter deal fell apart

The Source, a nonprofit based in Florida, was the only respondent to a very specifically worded request for quotations from the state — one that was named after their product. But then things got complicated.

The state of Rhode Island was in the process of purchasing a bus from The Source, a Florida-based nonprofit that converts used buses into homeless shelters for 20 people, until the deal fell through in early May 2023, after The Source had already begun the conversion.The Source

PROVIDENCE — In late 2022, Rhode Island state officials seemed to have found a creative way to address the homelessness crisis: providing overnight shelter on a specially equipped bus.

Discussions with The Source, a Christian outreach nonprofit based in Florida, started out strong. The Source converts buses into temporary shelters by outfitting them with about 20 bunk-bed-like pods, each just large enough for a person to sleep in. The buses also have toilets, storage compartments, personal lockers, and places for pets to spend the night.

But after about six months of negotiations, the plan to purchase a $150,000 Dignity Bus for use in Rhode Island seems stuck, with the state adding expensive requirements that were not part of the initial request, and The Source unable or unwilling to complete them.

“Their demands became completely unrealistic,” The Source’s Executive Director Anthony Zorbaugh told the Globe, adding that he “did everything he could” to work with the state.

“We jumped over every hurdle they asked us to and spent thousands of our own dollars. While we were trying to work to help your community, the state of Rhode Island held a small nonprofit hostage,” he said.

In January, The Source emerged as the only respondent in Request for Quotations, or RFQ, that was so carefully worded that its requirements nearly exactly matched the descriptions of the retrofitted buses on The Source’s website and social media accounts. The RFQ was titled “The Dignity Bus Pilot Program,” even though “Dignity Bus” is one of The Source’s registered trademarks.

The process seemed to move quickly. The RFQ was sent to vendors on Jan. 4; responses were due Jan. 11. The bidding process was cut short after the Division of Purchases approved requests “from the Department of Administration and the Executive Branch” to waive the state’s 28-day procurement schedule.

When Neil Steinberg, the president of the Rhode Island Foundation, reached out to The Source at the request of Governor Dan McKee, Zorbaugh told the Globe he thought the email was a fake.

“I really thought, ‘They want to work with us? Is this real?’” he said. “But when someone says that the governor of another state wants your help, and it matches your mission, you take it seriously.”

But after The Source had been chosen as the vendor for the project, Zorbaugh told the Globe, state agencies “kept adding new requirements” that were not included in the initial RFQ that The Source had responded to in January. On May 1, Zorbaugh received an official purchase order, which he said included a new demand that would require the nonprofit to transport the bus from Florida to Rhode Island for a state vehicle inspection before the purchase was finalized. If the vehicle failed inspection, it would have to return to Florida — at The Source’s expense.

“That was totally absurd. I’m a bus conversion company. I’m not a bus manufacturer or a vehicle inspector for 50 states,” said Zorbaugh. “If you buy a car that’s in Pennsylvania, it’s your job to get it inspected in Rhode Island. Not the job of the company you’re purchasing the car from.”

Sleeping pods inside the "Dignity Bus."The Source

The official purchase order required that The Source pay $12,000 upfront for repairs that were identified by an unnamed RIPTA employee who flew to Florida to assess the vehicle earlier this year. The Rhode Island Foundation gave $1,000 for The Source to obtain an American National Standards Institute certification that Rhode Island had not specified in the RFQ but later said was required. The Foundation had also committed $90,000 to staff the bus for its first six months if the state purchased the vehicle.

After beginning his communications with the state, Zorbaugh said he traveled to Maryland to purchase the previously owned bus, which was built in 1998. (A new bus, he informed Rhode Island officials, would have cost “about $1 million.”) Zorbaugh had the bus checked out by his mechanic, who said the bus “did not have any issues.” By Feb. 20, the bus had been fully converted into a shelter. Instead of The Source’s standard logo and wrap depicting an image of Jesus, The Source complied with the state’s request for an all-white exterior.

Earlier this month, Zorbaugh and his board of directors asked Rhode Island state agencies to pay a “good faith” deposit of 50 percent of the purchase price before The Source transported the bus from Florida to Rhode Island. On May 10, the state declined to pay the deposit, according to documents obtained by the Globe.

“Because of the insistence for up-front payment, if there was engine failure or other breakdown during the bus’s long trip to Rhode Island, the state would be facing an unknown bill or would be out of the money it invested,” said Lindstrom.

The matter was first reported by RI News Today.

“I would have never thought that a state agency would leave a small nonprofit out to dry after they had requested us to spend our operational money and over five months of jumping through hoops for nothing,” said Zorbaugh.

But Matt Sheaff, a spokesperson for the governor’s office, said that the RIPTA employee’s inspection report identified “many concerns,” including high mileage. Sheaff also said that The Source did not provide a “complete vehicle log and maintenance records” or “any safety certifications.”

“The vendor removed the entire heating system from the vehicle, which also removed AC and heating system from the driver’s area. There is no defroster system in the front of vehicle for the driver. In its current state, it would not be deemed road worthy by Rhode Island standards,” Sheaff told the Globe. “The vehicle would have to be repaired regarding these and any other items identified during a Rhode Island inspection, (including corrosion on two spots to the undercarriage) before it could be deemed sufficiently safe and roadworthy.”

But once converted into a shelter, as it has already been, the bus isn’t supposed to be used for transportation, Zorbaugh noted.

“These buses are not meant to drive people around. They are stationary. And they knew this before the guy from RIPTA was sent down here,” said Zorbaugh.

Zorbaugh told the Globe that he shared vehicle logs through “at least 2015″ and that all required documents, including safety certifications, had been given to the state. A staff member in the Department of Administration confirmed that Zorbaugh received a formal purchase order in early May, which would not have happened if Zorbaugh had not submitted the necessary documentation.

Housing department spokesman Joseph Lindstrom also confirmed that Zorbaugh had received the official purchase order, though he blamed The Source for “making the terms inconsistent with the RFQ” by “requiring payment before the bus was inspected and cleared as compliant with Rhode Island code.”

“The Department of Housing produced a purchase order that was consistent with the state’s Request for Quotations (RFQ) (published in January) and presented that purchase order under the terms that were expected all along,” Lindstrom said in a statement. “As stewards of taxpayer dollars, and given safety considerations, we did not find this demand to be acceptable. We remain open to revisiting this idea — in collaboration with potential host communities — under the right conditions.”

After months of effort to bring the Dignity Bus to Rhode Island, Rhode Island Foundation spokesman Chris Barnett said, “We are disappointed that... this realistic option for providing emergency housing for people who are unsheltered was not able to be completed by the state.”

Zorbaugh said he considered having an attorney look at the situation, but does “not want to waste our operating budget in court.”

“I run a nonprofit to help people. I didn’t ask for any of this political mumbo jumbo,” said Zorbaugh, who said he was encouraged to speak to members of the press by nonprofit and municipal leaders in Rhode Island. “They came to me asking for help. I jumped at the opportunity, but it’s been an incredibly exhausting and frustrating task.

“Now I have a bus sitting here in a lot while people are sleeping on the streets in Rhode Island,” said Zorbaugh.